Holding On to a Fading Tax
Add the Tax Foundation‘s Morgan Scarboro to the list of people observing that state-based estate taxes are on their way out:
In addition to the federal estate tax of 40 percent, some states impose an additional estate or inheritance tax. Twelve states and the District of Columbia impose an estate tax while six states have an inheritance tax. Maryland is the only state in the country to impose both. …
Recently, states have moved away from these taxes or raised the exemption levels:
- Indiana repealed its inheritance tax in 2013
- Tennessee repealed its estate tax in 2016
- New York raised its exemption level to $5.25 million this year and will match the federal exemption level by 2019
- The District of Columbia is set to conform to the federal level this year after meeting its revenue triggers
- New Jersey will fully phase out its estate tax by 2018
- Delaware repealed its estate tax this year
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Rhode Island is holding on to its estate tax for the time being, and it’ll probably take something like a political earthquake to shake it loose.